Obama Wants To Regulate Dervivatives - Should we be worried?

Discussion in 'Options' started by mp_strategies, Apr 19, 2010.

  1. Do you think the retail option trader needs to be worried about Obama's Proposed derivative regulations?

    Do we need to get out the picket sign and march on Washington or what?


    The Associated Press

    WASHINGTON | President Barack Obama vowed Friday to veto any financial overhaul that didn’t regulate derivatives.

    A Senate bill, reported out by the Banking Committee for floor debate, could be the first to regulate derivatives, the complex financial instruments that contributed to the economic meltdown in 2008 when their value plummeted.

    All 41 Republican senators lined up against that bill Friday and demanded further negotiations. But their opposition has focused on a $50 billion bank liquidation fund rather than on limits on derivatives.

    The administration appeared willing to go along with dropping that fund, which the GOP has labeled a bailout fund that would encourage banks to take undue risks. But the president was adamant that any changes in the bill should leave in the derivatives regulation.

    Senate Minority Leader Mitch McConnell of Kentucky said he and all 40 of his fellow Republican senators had signed a letter to Majority Leader Harry Reid, a Nevada Democrat, calling for more discussion aimed at changing the bill.

    The unified GOP stance came as a setback for majority Democrats who were hunting for individual Republicans to peel away to get the 60 votes needed to overcome a likely procedural roadblock.

    The Obama administration, through a senior Treasury Department official, said the bank liquidation fund was unnecessary and should be dropped. Under the Senate legislation, large financial institutions would provide the $50 billion, which the Federal Deposit Insurance Corp. would use to pay for dismantling failing firms.

    The administration instead wants the costs of liquidation to be paid by the financial industry after a firm has failed and been dismantled.

    Read more: http://www.kansascity.com/2010/04/16/1882494/obama-demands-derivative-regulation.html#ixzz0lVpTp1rS
  3. masonyes


    It's impossible to predict the outcome; Obama has shown an amazing political finesse in passing the health-care bill, a feat amazing by itself and more so given that he in 50 some odd years he is the only president that has successfully accomplished this when all others have failed. This in consideration with the 59 democratic majority and america's visceral resentment of wall street, of the big banks, of goldman sacs and their attribute of the "greatest recession since the depression" due to wall street makes the bill much easier to pass than health care reform. However I have no doubt republicans will be lock-steped in their opposition and perhaps will have a strong motivation to succeed after their humiliating defeat. However a few republicans could easily change party-lines this is politics after-all and if they vote against the evil banks that ruined the economy and lets millions poor, hungry and without jobs their constituents are going to hate them in an election year. I personally think it's going to pass albeit watered down and effectively useless.
  4. AK100


    I think retail option traders have little to worry about. As long as they're available to be ripped off and generally dicked around they'll be very welcome particpants in the market :)
  5. cstfx


    Retail, exchange traded option traders have little to worry about in this proposed regulation. What this will do is put the derivatives on exchanges, which is a good thing for all those old floor traders and trader wannabes. There's a whole trading floor down at the NYMEX sitting empty when most of the crude and metals went electronic. This potentially can be a good thing employment wise for the financial community.


    Look at the overall size of this OTC market they want regulated compared to everything else
  6. nickdes


    Anything that obama does should worry us!
  7. Any organization that refuses, or is incapable of regulating itself, opens itself up for government regulation. They brought this upon themselves with a complete lack of business ethics, or business sense for that matter, along with practices that bent the law to the breaking point. Hence, the government has to step in and defend the people from economic terrorism.
    Bitch all you like, but the Street has no one but themselves to blame.
  8. why is he doing it?
    To Be importatant.
    Since it a zero sum game...why doesn't just stop trading
    Classical Economic theroy is the right one
    If you let it be then it fixes itself
    Sort of when it's hot, it will cool down soon
    he is playing the Human race Doc....they all do
  9. We know enough about him by now to FEAR "everything he WANTS"..